Martin Scovell looks at how banks can engage with customers on an individual basis…while saving money at the same time!
Delivering an improved customer experience. Reducing costs. But which to choose? Fail to cut costs and the business is undermined. But fail to deliver great customer service, buyers will go elsewhere and there’s no business left. Someone once told me: “Both great objectives but you need to decide which one you’re aiming for since only a magician can do both!”
Well, some progressive banks would beg to differ – as we shall see in a moment. But let’s first take a brief step back to see how we got to this point.
In the beginning there was the big corporation. Size meant power, influence and safety, and individual customers felt that they occupied a pretty insignificant place within in the corporate machine. Who could blame them? A business with a billion customers meant that an individual customer’s opinion was about as important as a grain of sand in the composition of a beach, and some businesses treated customers accordingly.
In fairness, how was the big corporation supposed to engage with an individual customer? There was simply insufficient time and resource to dedicate to dealing with billions of people one-at-a-time. The efficiency of the big organisation came from its ability to herd customers into following its own systems – to fit in without causing problems, time and expense.
One of the industries with the biggest headache was the financial services sector; their very success selling and processing millions of loan applications or insurance claims presented a nightmare if even a small percentage of those customers started jamming switchboards by innocently requesting application progress updates. Holding in a queue while beleaguered members of staff hunted for information was inevitable – to the frustration of the customer and at huge cost to the business.
But as customers, what choice was there?
‘Doing More for Less’ as a Catalyst for Change
Then, along came ‘doing more for less’ – reducing costs and increasing efficiency somehow married to the objectives of retaining customers and winning new ones, in a competitive environment. Grabbing more sales opportunities with the same or less resource demanded streamlining.
The catalyst for that change was triggered by the two drivers of the internet and Generation Y – a group which cared nothing for call-queues and letter writing but understood and took for granted the convenience of instant communications – with 24/7 Smartphone access from their sofa, desk, bed or holiday. It was dangerous to underestimate such customers and a waste of time to explain why their demands could not be met – they would simply migrate elsewhere.
Failing to appreciate the mindset of this new generation of customers and to grab new technology created to meet their service demands was a massive threat to the big corporations.
In fairness, some global banks were the first to lead the way, spotting the opportunity beyond the threat, innovating and working with partners such as Vodafone Global Enterprise. But some businesses failed to adapt and stuck with their turgid and unresponsive legacy systems. They were quickly punished. Because, for the first time, customers had at their disposal the ability to scale up their importance and magnify their influence by engagement with others.
Crime and Punishment
Social media makes customers powerful advocates if they like what a business does – but formidable enemies if they are unhappy with the service they receive. People are still talking about the incident in 2009 when a United Airlines traveller saw his guitar damaged by luggage handlers, and found his protest ignored by customer service staff. Before social media his complaint would have counted for nothing – the tiny voice of that grain of sand.
The mistake United Airlines made was to ignore the opportunity to secure the customer as an advocate by improving his experience. UA saw him as a lone-voiced, insignificant; but he was certainly not a lone voice for long. His YouTube video went viral and he was soon joined by eleven million supporters attacking United Airlines’ poor customer service. UA’s failure to understand customer relationships cost its shareholders a reported $180 million.
Build – or destroy
Some marketers say that everything a firm does involving its customer interaction is either a relationship builder or a relationship destroyer. News travels fast, and failing to embrace business simplification tools for process management and customer service can trigger a PR nightmare.
When Netflix announced a new pricing structure, some customers spotted that bills could rise by as much as 60 per cent. Before Generation Y, customers would have been left muttering to themselves in isolated frustration. But within six hours of the announcement Facebook was buzzing with more than 9,000 comments. By the time Netflix woke up to the significance of the protest a remarkable 805,000 customers had cancelled their subscriptions.
The dream ticket
But it’s not all bad news. Creating a personalised customer experience while reducing costs due to efficiencies is achievable. Ask the people who have done it. Pioneers such as Santander, Nationwide Building Society, Barclaycard and RBS have rolled-out agile connected communications to deliver a great online experience by providing a consistent real-time multi channel service – SMS, email, web and social – to a population that is plugged in 24 hours a day, 7 days a week.
Building customer trust through SMS updates, allowing customers to keep on top of their finances or to initiate a transaction through one channel, pause and resume through another without duplication are some of the key values that this generation of customers expect – and that some already receive!
At the same time financial services firms have streamlined, adding simplification and transparency whilst reducing operating costs. Some are reporting customer chase calls down by 65 per cent and complaints down by 90 per cent.
Never before has the service delivery of big corporations been so polarised – unlocking enormous potential for adopters… while simultaneously exposing the risk of dinosaur-like extinction for the complacent.
Business simplification expert Martin Scovell is CEO of www.MatsSoft.co.uk – providing agile communications solutions to the global financial services industry.
An unprecedented Black Friday: How can retailers prepare?
Retailers must invest heavily in their online presence and fight hard to remain competitive as a second lockdown stirs greater uncertainty
With an unprecedented Black Friday and Cyber Monday weekend on the horizon (27th – 30th November), eCommerce hosting and consultancy expert, Sonassi, advises retailers to strengthen their online presence and make the necessary preparations for a fatigue in consumer spending.
James Allen-Lewis, Development Director at Sonassi, explains: “This year’s golden quarter has squeezed together three of the biggest sales periods like never before, meaning retailers will have to fight harder than usual to remain competitive this Black Friday. With greater discounts over a longer period of time, alongside the fact that a second lockdown has moved everyone and everything online, retailers will be battling it out for a share of decreasing consumer spending.
“However, this sense of uncertainty should not deter merchants from implementing their sales strategies this Black Friday and Cyber Monday weekend. Instead, they must go further than simply providing online discounts and tackle challenges head on by re-focusing their efforts on creating a highly competitive user experience. Successful merchants will make the necessary preparations for a change in consumer demand and invest more heavily in their eCommerce infrastructure.
“One way in which retailers can do this is by using last year’s Black Friday as a case study to inspire their future response. For example, retailers should take note of the key consumer behaviours that transpired throughout last year’s mega peak in discounting and plan accordingly for the upcoming Black Friday and Cyber-Monday weekend.
“Tactics such as providing the ultimate online delivery service and secure payment methods will also be pivotal for retailers looking to survive a fatigue in online spending. Consumers will look to retailers who do not overpromise on items like next-day delivery and ensure their checkout process is safe and frictionless for all. It is the retailers who embrace this fact and meet the needs of the conscious consumer that will win their share of consumers wallets.
Allen-Lewis concludes: “With Black Friday and the build-up to Christmas just around the corner, retailers must adapt to changing consumer demand, invest more heavily in their eCommerce infrastructure and focus their efforts on creating the ultimate online experience. The only way to plan ahead amid challenging times is to listen to the needs of the customer.”
Optimistic outlook for 2021 public M&A
Optimism is returning and the outlook is positive for the Australian M&A market in 2021 after a COVID-induced crash in deal activity in 2020, according to Corrs Chambers Westgarth’s tenth M&A 2021 Outlook report.
The special report reveals that an environment of historically low interest rates positions M&A as a significant means of achieving growth and generating returns, including for private equity firms looking to deploy capital and strategic buyers focused on complementary acquisitions.
With the unprecedented challenge of the COVID-19 pandemic, global political instability and arguably the greatest economic challenge since the Great Depression, M&A 2021 Outlook details somewhat surprising trends emerging for the next 12 months and analyses a number of common COVID-19 myths and their influence on future M&A deal making.
Corrs’ detailed examination of the Australian M&A market draws on data taken from the firm’s proprietary database of transactions combined with in-depth research for the 12-month period ending 30 September 2020.
Key trends identified in the report include a rapid escalation in M&A levels and an increase in creativity in pricing and speed in closing deals, while also highlighting the critical need for support from target shareholders. Conditions also appear to be set for a continued rise in equity prices as a result of the ongoing influx of capital into Australian equity markets, making it imperative that bidders employ strategies to move quickly on M&A transactions.
Discussing the M&A 2021 Outlook, Corrs Head of Corporate, Sandy Mak, said “Despite a challenging year, our research indicates that 2021 could well see the volume and value of deals continue to grow. We are already witnessing this uptick in activity and while some industries and sectors are seeing a faster rebound than others, early indications are that the wider public M&A market will continue to strengthen over the coming months.”
Based on its detailed research, the M&A 2021 Outlook report discusses further key findings including:
- Deal volume and value is the lowest since 2016, however volumes have shown significant recovery since June 2020.
- More than 50% of deals in 2020 were ‘hostile’ and not recommended at the outset.
- 71% of deals over A$500 million were structured by way of a takeover – a significant increase from prior years – largely as a result of increased competition for assets through rival bids.
- Despite border closures and the tightening of foreign investment regimes, the percentage of deals with foreign bidders has increased materially since April 2020.
5 steps for SMEs to budget properly for the coming year
By Fabio Comminot, Head of Dealing, Switzerland at Ebury, one of Europe’s largest Fintechs, has provided a five-step guide to make sure budgeting is done on time.
During the challenging times of COVID-19, it is difficult to forecast orders and costs. This is especially true for SMEs that operate internationally and therefore are exposed to currency fluctuations and market movements. So budgeting is immensely important.
Autumn is budget season for most companies. Upcoming project costs, sales and fixed costs must be defined or forecasted. Budget planning should be as accurate as possible right from the start of the process to avoid unexpected consequences at the end of the year..
With the effects of the COVID pandemic it has become difficult for all companies, no matter their size or history, to plan and make sales forecasts. Early planning and hedging are especially important for companies that work internationally and are therefore particularly exposed to currency risk.
These five steps will help SMEs take the right measures for the coming financial year, in time for budget season:
Step 1: Estimate your costs or sales in foreign currencies
As difficult as it may seem, every company must estimate its expected fixed and variable costs for the coming year. Most companies can forecast their revenues based on experience or existing orders.
However, start-ups or young companies should also be able to at least estimate their costs including rents, insurance, wages and production costs. Special attention should be paid to costs or revenues that are spent or received in a foreign currency.
Step 2: Profit or cost assurance – define the strategy
As soon as an approximate plan for the coming year is in place, the company should consider the importance of currency management. Regular earnings or expenditures in foreign currencies are exposed to movements in exchange rates. If costs in a foreign currency are to be forecasted until the end of the year, the company needs to minimise volatility. This means that the exchange rate should be fixed so that there are no unexpected negative consequences at the end of the year.
Another option would be to protect the operating profit. Fluctuating exchange rates can rapidly ruin intended profit margins. In this case the company could aim to define the forecasted sales in the foreign currency and fix the margin based on this.
Step 3: Fix your budget rates
The budget is set, the currency management goals are defined, the major part is done. Now it is a matter of defining the budgeted rates for the various currencies based on the current exchange rate. A buffer of about 5% can be useful when doing this – for example. instead of fixing the exchange rate from US dollar to Swiss franc at the current 91 cent, a rate of 95 cent could be budgeted. In this way, the minimum budget rate is defined and any negative exchange rate movement can be at least partially compensated for.
Step 4: Define the hedging strategy
With the targets and the budget course set, the next questions are: What currency developments can be expected? What is the industry outlook? Is the order situation relatively secure? Or is there practically no empirical data?
This step is where Ebury can support the company. Our experts in FX markets help answer these questions and begin to define the individual hedging strategy.
Step 5: Ensure a flexible fit
It’s done: the measures have been defined, now it’s time for implementation.
Ebury will implement the previous steps and , so that the company focuses on its core business. In contrast to traditional financial services providers such as banks, Ebury constantly monitors international trade and political events in order to assist clients with strategy adjustments. The Ebury team is supported by state-of-the-art technology and international currency analysts. It makes no difference whether the changes are driven by the currency market or whether the company’s order situation itself is changing. This allows the SME to focus on its operational business, which is worth a lot in uncertain times like these.
Barclays announces new trade finance platform for corporate clients
Barclays Corporate Banking has today announced that it is working with CGI to implement the CGI Trade360 platform. This new...
An unprecedented Black Friday: How can retailers prepare?
Retailers must invest heavily in their online presence and fight hard to remain competitive as a second lockdown stirs greater...
What’s the current deal with commodities trading?
By Sylvain Thieullent, CEO of Horizon Software The London Metal Exchange (LME) trading ring has been the noisy home of...
Optimistic outlook for 2021 public M&A
Optimism is returning and the outlook is positive for the Australian M&A market in 2021 after a COVID-induced crash in...
The ever-changing representation of value
By Vadim Grigoryan, Partner, Lunu Solutions Ask a selection of people about cryptocurrencies and you’ll likely receive a wide range...
Revolut Junior introduces Co-Parent – teach children about money together
Premium and Metal customers can invite a team mate to jointly manage their child’s Revolut Junior account Setting Tasks, Goals...
The Next Evolution in Banking
By Young Pham, Chief Strategy Officer at CI&T Everything we know about banking is about to change. A new industry...
Equity Sharing – How do you choose the right plan for you?
By Ifty Nasir, co-founder and CEO of Vestd, the share scheme platform In a survey of 500 SMEs, nearly half...
Cash was our past, contactless is our present, contextual payments are the future
By Jason Jeffreys, founder of FETCH $6tn in the next five years, this is how much the world will spend...
Iron Mountain releases 7-steps to ensure digitisation delivers long-term benefits
Iron Mountain has released practical guidance to help businesses future-proof their digital journeys. The guidance is part of new research that found...